Cable has failed to sustain gains above 1.2200 on two occasions now since first breaching below this level during the London AM session, and has also breached and seven-week low at 1.2182 and traded as low as 1.2170 intraday. Sterling also remains heavy, although off earlier lows versus the euro and yen. The OECD’s upward revision of its UK growth forecast, to 1.6% for 2017 from 1.2% estimated before, though the organisation thinks that growth will ebb back to 1.0% in 2018 well of the 1.6% it forecasts for the Eurozone and the 2.8% growth envisaged for the U.S. Last week’s disappointing PMI February survey data continues to resonate, while Halifax house price data today showed the weakest y/y growth in three-and-a-half years. Brexit-related issues are resurfacing to a more prominent position, with the House of Lords holding its final debate on the Brexit bill, and with the government expected to invoke Article 50 of the Lisbon Treaty by the end of the month, which will finally start the two-year negotiation period of the UK’s divorcing terms from the EU. My short position from February 6 (1.2464) hit target 1 (1.2300) last week and target 2 (1.2150) remains the next level.
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